The regular session of the International Monetary Fund (IMF) and the World Bank has ended
World finance ministers call for accelerating economic reforms and restoring confidence in finance.
After two days of discussions, the IMF’s governing body, the International Monetary Finance Committee, issued a communiqué confirming that global economic growth has slowed and that significant risks remain to threaten international financial stability..
However, the head of the International Monetary Committee, Finance Minister of Singapore Tharman Shanmugaratnam believes that compared to the beginning of the year, the situation has improved: “We are in a better position than six months ago.” He warned that if the budget crisis in the United States is not resolved, it could negatively affect the whole world..
If the US Congress does not take decisions on reducing the budget deficit by the end of the year, then government spending cuts and tax increases will be made automatically.
Treasury Secretary Timothy Geithner said the United States has made some progress in this area, but much remains to be done..
He made this statement after the US Administration announced that the budget deficit for the fourth year in a row exceeded $ 1 trillion..
Participants in the session of the International Monetary Fund and the World Bank also expressed disappointment with the slow pace of reforms in Europe. Of particular concern is the situation in countries experiencing particularly serious problems, such as Greece. The session participants tried to find out how long it will take them to carry out budget cuts and whether the measures taken earlier are enough for banks to start actively lending to their clients again, which is necessary to get out of the recession.
IMF Managing Director Christine Lagarde said: “I think everyone agrees that it takes collective action to get things done.”.
However, Lagarde’s statement released on Saturday is rather bleak. It states that limited progress has been made in tackling the debt crisis, that financial systems remain vulnerable, and that confidence in finance has yet to be restored due to uncertainty over what decisions individual governments will make on key issues..
WATCH: The IMF and World Bank hold a news conference on the global response to coronavirus:
A joint communiqué from the governors of the International Monetary Fund and the World Bank expresses concern that the financial crisis has created far fewer jobs than needed.
Governors also called for renewed aid to the Sahel, where 19 million people suffer from hunger that threatens the stability of the entire region..
The IMF also pledged to help the poorest countries by allocating $ 1 billion for this..